The benchmark indices closed with modest loss and were trading volatile allthrough the session. The Sensex closed 81 points lower at 10,898 after hitting an intraday high of 11,068 and low of 10,764.

The Nifty was down 12 points to end the day at 3,365. It hit an intra-day high of 3,414 and low of 3,309.

Among the broader indices, BSE Midcap Index slipped 5 points, whereas Smallcap Index closed after gaining 17 points.

The selling action witnessed across shares of major banking, capital goods, metal and auto companies, and buying was seen in select telecom, real estate and FMCG sectors.

The market breadth was slightly weak and the volumes are on the lower side.

The bulls are finding it difficult to hold the impetus on the higher side and nifty is also confronting strong resistance above its 200-day moving average. The outlook is little bit cautious as nifty is unable to sustain above the 3,400 mark and the market volumes have also decreased in the last couple of days.

The stock market is complicated at this level and it seems that if nifty breaks the 3,300 level then investors could see extreme selling taking place. Technically the RSI is at 68 and is still in an overbought territory and our sense is that nifty should correct at least 5-8% from the current level and consolidate at lower level before making a fresh upmove.

Nifty is caught in the tight range of 3,300-3,420, a strong move beyond these range on the either side will give a clear direction in coming days. The immediate short-term support for nifty is at 3,310 – 3,230 region and a fall below will create more pressure and nifty can fall upto 3,155-3,110 in coming days, which could be the best level to enter for a medium term investors .

Strong intra-day resistance area is at 3,380-3,420-3,440.